Genzyme Up 11%; Fabrazyme To Bypass FDA Panel Review
Beth M Mantz / Dow Jones Newswires 2nov00

NEW YORK -- The winner-take-all race between companies seeking the first approval for a Fabry disease treatment intensified in the last 24 hours.

After the closing bell Wednesday, Genzyme Corp. - General Division (GENZ) said it received notice from the Food and Drug Administration that the firm's Fabrazyme, an orphan drug to treat Fabry disease, doesn't need review by the advisory committee. A panel meeting to review the biologics license application for the treatment had been scheduled for December.

"If the (FDA) is bypassing panel review, it means they they are happy with the drug (because) by and large, most drugs, devices, and biologics get before a committee" so the committee can address any questions about the quality, safety outcomes, or medical concerns, said Robert Pinco, an attorney at the Washington office of Buchanan Ingersoll.

Based on his experience, including working at the FDA and representing clients in front of the agency, virtually all orphan drugs are reviewed by an advisory panel even though there is a real need for a treatment and speed is emphasized, he said.

Fabry disease, affecting about 5,000 people worldwide, is an inherited rare genetic disorder caused by deficient activity of lysosomal enzyme alpha-galactosidase A. Because sufferers can't break down blood fats, the disease can lead to stroke, cardiac disease, kidney failure, severe pain and numbness.

Both Genzyme and Transkaryotic Therapies Inc. (TKTX) have developed their own enzyme replacement therapies to treat Fabry disease, and submitted filings to the regulatory agency within a week of each other in late June. Both drugs, accepted for priority review, have been afforded orphan drug status by the FDA.

The regulatory agency will deem certain drugs "orphans" if they meet an unmet need and treat a patient population less than 200,000. The status is designed to entice drug developers to invest in research for rare diseases by endowing with 10-year exclusivity for being the first to develop the drug. However, under FDA rules, only one orphan drug can be approved to treat the rare disorder.

Under priority review, the process should last about 6 months, instead of one year. An agency decision is expected by mid-January.

Analysts estimate the Fabry disease drug could cost about $50,000 to $100,000 a year.

Transkaryotic spokeswoman Justine Koenigsberg said the company does not expect to have panel review for Replagal, its Fabry treatment. She would not comment further on discussions with the FDA.

Shares of Genzyme General recently traded up $7.44, or 10.2%, to $80.69 on composite volume of 2.9 million shares, compared with average daily volume of 1.3 million.

Shares of Transkaryotic recently were unchanged at $39.19 on composite volume of 15,100 shares, compared with average daily volume of 172,360 shares.

Separately, Salomon Smith Barney analyst Meirav Chovav upgraded the shares to buy from outperform, and raised her price target to $100 a share from $80.

Chovav believes that Genzyme could achieve an earnings-per-share growth rate between 20% to 25%, despite a 10% dilution after the acquisition of GelTex Pharmaceuticals Inc. (GELX), as written in a research note.

She cited the potential of Renagel to achieve sales higher than her 2001 sales estimate of $90 million, based on rising demand of the drug used by renal disease patients on dialysis to control phosphorous levels.

"On average, total weekly October Renagel scrips (prescriptions) were up by 19% from September. In particular, after the Renagel presentation at (the American Society of Nephrology) on Oct. 15, we observed a significant uptake in new scrips," Chovav wrote.